CHINA has told its securities firms and their offshore units to stop conducting illicit cross-border business, including brokering shares and selling funds to domestic investors, in a bid to plug regulatory loopholes. The overseas units must stop all marketing activities and promotions aimed at mainland investors and close all channels for new account openings, including onshore apps and websites, by Oct. 31, according to a notice from the China Securities Regulatory Commission (CSRC). New investments by existing mainland clients are also to be “strictly monitored” to prevent investors bypassing China’s foreign exchange controls, the notice said. Authorities are increasing scrutiny to prevent people from evading domestic capital controls in a bid to tamp down on cross-border capital flows that could risk financial stability. It was not clear when the new directive was effective, but sources familiar with the matter said they believed the regulator meant effective immediately. An end-October deadline was set for the removal of apps and websites soliciting mainland clients, the notice also said. The notice broadens directives to more traditional mainland brokerages. Regulators have previously disciplined online firms such as Futu Holdings Ltd. and Up Fintech Holding Ltd. for catering to mainland clients through their widely used trading apps. China bars its individuals from using their annual US$50,000 foreign exchange quota for direct offshore investments including securities. (SD-Agencies) | 